The hotel industry within the United Kingdom is a extremely competitory market with many different hotel administrations, such as Tune Hotels, each seeking to offer something alone, desirable and profitable. It is hence of import for administrations within this industry to stay invariably cognizant of the external factors that could potentially impact their public presentation and productiveness. In this study I am traveling to place and explicate the cardinal political, economical and socio-demographical factors that are presently holding an consequence upon the industry ; these are three headers within a PESTLE analysis. PESTLE analysis is a tool that can help administrations when doing schemes by assisting them understand the external environment in which they operate in the present and future ( Renewal Associates, 2003 ) . Once I have done this I will so pull upon my analysis and conclude with my ideas and recommendations about the proposed UK enlargement of Tune Hotels.
The UK Hotel Industry
As for most concern administrations, it has been a tough clip financially due to the recent planetary recession ; nevertheless, harmonizing to an article on www.hotel-industry.co.uk, things are looking up for the hotel industry. ‘Despite the recession, the UK hotel industry is go oning to spread out, with over 10,400 suites opening in 2010 and a farther 43,000 for the period 2011-2015. ‘ ( Hotel Construction, 2010 ) . The article goes on to advert how consumers are merely choosing for low-cost, budget branded hotels, such as Tunes, during this clip of fiscal uncertainness.
Political Environment
The political environment is an country that concern administrations need to supervise invariably as political relations can be really unpredictable and influential at times. ( Palmer, A. Hartley, B. 2006, P7-8 ) This is because authoritiess have the power to present statute law and ordinances that may hold a profound consequence on administrations. Whilst the UK is a comparatively free market, the authorities will still maintain a stopping point on what is traveling on in the private sector to guarantee that concerns are working within the best involvements of the state.
These are merely some of the political factors that may hold an consequence on the UK ‘s hotel industry:
* Digital Economy Act 2010 ‘ The Digital Economy Act 2010 is an act of parliament which was put in topographic point chiefly to diminish the sum of illegal file sharing and copyright violations that presently takes topographic point in today ‘s digital society. However this has been met by ferocious unfavorable judgment from constitutions, such as hotels, that offer free Wi-Fi cyberspace connexions hot musca volitanss. If hotels invitees break this jurisprudence whilst utilizing the hotel ‘s connexion, so it is the hotel that is, finally, held responsible and accordingly face the possibility of holding their cyberspace connexion disabled by the service supplier ( Benson, P. 2010 ) . This may set hotels in a gluey state of affairs as they will hold to make up one’s mind whether or non to get down bear downing for the convenience of internet connectivity ; which could set possible clients off.
* New Immigration Policies ‘ New in-migration policies from the alliance authorities have caused some concern for the UK cordial reception industry. ‘Caps on in-migration outside of the European Economic Area could pretermit the issue of accomplishments deficits in the UK ‘s cordial reception sector ‘ , claim the Recruitment and Employment Confederation, who go on to state: ‘Apart from operational functions such as chefs and saloon staff, a deficit has been highlighted in direction accomplishments. Deficits in the UK market continue to be with merely 10 per cent of hotel directors and six per cent of eating house and catering directors holding makings at managerial degree ‘ ( Essentiallycatering.co.uk, 2010 ) .
Economic Environment
* Crowded Market ‘ There is presently much competition for Tune in the UK ‘s budget hotel market at the minute, particularly in London. Trade names such as easyHotel, Travelodge and Premier Inn all offer a similar service to that of Tune Hotels, but at lower monetary values ; and some of them offer supernumeraries such as towels within the room monetary value. ‘Travelodge presently offers suites at a promotional monetary value of ’19 and, like the Premier Inn concatenation, their suites are family-friendly and they provide most extras free of charge ‘ , provinces Susannah Streeter ( 2010 ) .
* Increase in UK touristry disbursement ‘ ‘The addition in UK visitants comes after the recession and the autumn in sterling ‘s value against the euro and dollar deterred Britishers from doing abroad trips. As a consequence, disbursement by tourers in the metropolis hit a record ‘10.5billion ‘ ( Sri Carmichael, 2009 ) . This is great intelligence for the hotel industry.
* VAT Increase – As the alliance authorities start to move upon the UK ‘s budget shortage, the recent VAT addition from 17.5 % to 20 % will no uncertainty put more strain on the consumer ‘s disposable income and put more strain on people ‘s budgets. Lisa Francesca Nand ( 2011 ) states that the addition will deter disbursement and discourage UK-based invitees and abroad visitants likewise. However there are positives that can be drawn from this VAT addition for some concerns. Such additions will go on to deviate clients off from ‘highly priced hotels with underutilised installations ‘ as Mark Lankester suggested in the Tune Hotels Press Release ( 2010 ) . Peoples will be looking for cheaper ‘No frills ‘ adjustment such as Tune Hotels. The low cost, limited service concern theoretical account has been a proved success over the past twosome of old ages with in other industries administrations such as AirAsia, an affiliate company of Tune Hotels, touting success.
Socio-Demographic Environment
* London 2012 Olympics ‘ The London 2012 Olympic Games have intelligibly been described as an ‘opportunity of a life-time ‘ for the UK cordial reception industry by hotel-industry.co.uk. The games will convey in an inflow of people from all over the universe to London which will doubtless intend increased demand for hotels. However I think that this will merely convey limited usage for Tune Hotels ; as the games are stretched out over a two hebdomad period, I think that the people who are remaining in London for a twosome of yearss will be more than happy with the service that Tune Hotels provide as a comfy bed and a hot shower is all that most people require during a short hotel stay. On the other manus, I think long-stay visitants will be put off by the inability to budget under the ‘pay-as-you-use ‘ system operated by Tune Hotels.
* Location ‘ Location is really of import within the hotel industry, even more so with the London 2012 Olympics around the corner. Hotels in London need to be near to transport links, attractive forces and other comfortss in order to pull in a healthy Numberss of clients as cipher wants a hotel excessively far off from their desired location. This is a possible job for Tune Hotels and their proposed UK enlargement as there could be some trouble in happening appropriate sites for their ambitious figure of 15 hotels in an already concentrated market.
Recommendations and decision
All in all I think Tune Hotels have a reasonably good opportunity of doing the UK enlargement a success with their low costing concern theoretical account, peculiarly with the Olympics on the skyline and the increased demand for hotel adjustment in London that the games will bring forth. However, I think it would be wise for Tune to offer some sort of inducement or particular Olympic bundle to possible invitees during the games to entice them off from rival hotels ; an across-the-board option for the invitees remaining for longer periods, possibly?
However, I think 15 hotels is a small ambitious in the competitory jungle of London and Mark Lankester should believe about take downing his aspirations of all time so somewhat to and get down speaking about more realistic Numberss like five or six. This would intend Tune could concentrate on holding a smaller figure of hotels in more desirable topographic points as opposed to a big figure of hotels in less sought after locations.
The enlargement would besides make a figure of occupations for the people of the UK
